CSC Exam 2 Questions and Answers Updated 2026

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CSC Exam 2 Questions and Answers Updated 2026

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CSC Exam 2 Questions and Answers Updated 2026

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CSC Exam 2 Questions and Answers
Updated 2026
WhatMtremendousMflexibilityMinMtheMtypesMofMinvestmentMstrategiesMheMorMsheMcanMe
mploy,MtheirMabilityMtoMselectMsuperiorMinvestmentsMwithinMtheMtargetedMstrategyMand
MrelevantMmarketsMisMmoreMimportantMforMwhichMfundsMthanMforMalmostManyMotherM
managedMproduct.M-MAnswerMHedgeMFund

WhatMareMtheMthreeMcommonMprospectusMexceptionsMforMHudgeMfunds?M-
MAnswerM•MMinimumMinvestmentMexemption

M•MAccreditedMinvestorMexemption

•MOfferingMmemorandumMexemption.

WhatMeMminimumMinvestmentMexemptionMallowsMtheMsaleMofMsecuritiesMwithoutMaMpr
ospectusMtoMnon-individualMinvestorsMwhoMmakeMaMprescribedMminimumMinvestment?M-
MAnswerMNationalMInstrumentM45-106M(NIM45-
106)MsetsMthisMminimumMatM$150,000MacrossMallMjurisdictionsMinMCanada

WhatMisMtheMcriteriaMforMqualificationMasMaccreditedMinvestorsMbyMinstitutionalMclient?M
-MAnswerMnetMassetsMofMatMleastM$5Mmillion

WhatMisMtheMcriteriaMforMqualificationMasMaccreditedMinvestorsMbyMIndividualMclient?M-
MAnswerM-
MindividualMwho,MeitherMaloneMorMwithMaMspouse,MbeneficiallyMownsMfinancialMassetsM
withManMaggregateMrealizableMvalueMthatMexceedsM$1Mmillion

-
MAnMindividualMwhoseMnetMincomeMbeforeMtaxesMexceededM$200,000MinMtheMpastMtw
oMyearsM(M$300,000MifMtheirMisMaMspouse)

-
MindividualMwho,MaloneMorMwithMaMspouse,MhasMnetMassetsMworthMatMleastM$5Mmillio
n

WhatMensuresMthatMaMfundMmanagerMisMpaidManMincentiveMfeeMonlyMonMnetMnewMpr
ofits.MBasically,MaMhigh-
waterMmarkMsetsMaMbarMaboveMwhichMtheMmanagerMearnsMincentiveMfees.MThisMfeatur
eMpreventsMtheMmanagerMfromMdouble-
dippingMonMincentiveMfeesMfollowingMperiodsMofMpoorMperformance?M-MAnswerMHigh-
waterMmark

, WhatMisMtheMrateMaMhedgeMfundMmustMearnMbeforeMitsMmanagerMisMpaidManMincenti
veMfee?M-MAnswerMHurdleMrate

AMfundMhasMaMhurdleMrateMofM5%,MandMtheMfundMearnsM20%MforMtheMyear.MWhatM
willMtheMincentiveMfeesMwillMbeMbasedMon?M-MAnswerM15%

WhatMfollowMaMprescribedMformMandMprovideMforMtheMrightsMofMrescissionMorMaMrigh
tMofMaction,MifMtheseMareMnotMavailableMbyMregulation.MIncludedMinMtheMexpectedMpr
escribedMdisclosureMisMinformationMregardingMtheMissuerMandMauditedMfinancialMstateme
nts.M-MAnswerMofferingMmemorandum

WhatMriskMstemsMfromMtheMfactMthatMalternativeMstrategyMfundsMcanMbeMsmall,Mnewly
McreatedMbusinessesMthatMdependMonMoneMorMmoreMhigh-
profileMmanagersMforMtheirMsuccess?M-MAnswerMOperationalMRisk

WhatMisMtheMriskMthatMprofileMmanagersMlackMtheMorganizationalMdepth,MmanagerialMta
lent,MandMstrategicMplanningMcapabilitiesMnecessaryMtoMensureMgrowth,MorMevenMsurviva
l.MForMmostMalternativeMstrategyMfunds,MoperationalMriskMstemsMfromMpotentialMsystem
Mfailures,MasMwellMasMfaultyMsettlement,Mreporting,MandMaccountingMprocedures.M-
MAnswerMOperationalMrisk

WhatMareMassetMclassesMthatMareMdifferentMfromMtheMtraditionalMthreeMbroadMassetMc
lassesMofMequities,Mbonds,MandMcash?M-MAnswerMAlternativeMinvestments

WhatMareMtheMthreeMcategoriesMofMalternativeMinvestments?M-
MAnswerM•MalternativeMstrategyMfunds

•MalternativeMassets

•MprivateMequity

WhatMstrategiesMattemptMtoMprofitMbyMexploitingMdiscrepanciesMinMtheMpricingMofMrelat
edMstocks,Mbonds,MorMderivative?M-MAnswerMRelativeMValue

WhatMstrategiesMmaintainMpositionsMinMcompaniesMcurrentlyMorMprospectivelyMinvolvedMi
nMcorporateMtransactionsMincludingMmergers,Mconsolidations,Mrestructurings,MtenderMoffers
,MshareholderMbuybacks,MandMotherMcapitalMadjustments?M-MAnswerMEvent-Driven

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